What’s the key to managing risk?

November 9. 2023 by Mike Manazir – (4-5 minutes)

I mentioned in a previous newsletter that I received orders from Admiral Bob Willard, Commander of the US Pacific Command in June 2007 to make a port visit to Chennai, India, that was important to the President of the United States.

A few days later, we found ourselves in the middle of a ferocious southwest monsoon in the Indian Ocean. Sixty-foot waves and a raging wind buffeted the big ship. I had lashed down the airplanes with extra chains, closed the flight deck, and told the crew, “We’re going to be in the middle of this thing for a while. Just stay inside, it’s all good. And by the way, if you go overboard, the chances of us picking you up successfully are slim. I am probably not going to risk a small boat or helicopter.” They stayed inside.

The Navy requires that you navigate through a storm using Optimal Track Ship Routing (OTSR), a system developed after World War II. Typhoon Cobra cost Admiral Halsey three destroyers and 790 sailors. Due to the risk of loss of ship and lives, if you choose to deviate from the routing, you have to report to a higher authority that you’re going to deviate. Deviation is rare.

I was on the bridge looking at weather reports and printouts of the winds and wave directions every fifteen minutes. The ship was plunging into the seas, with the bow rising and falling some sixty to eighty feet at a time. Waves were breaking over the starboard bow as our OTSR track took us closer to the eye of the monsoon, annotated in red blotches on the printouts. Equipment started to break loose in the hangar bay.

The routing system was taking us right through the middle of the worst part of the storm, and the way that the wind and the waves are working, we’re getting beat to hell.

I was staring at the waves, reading them and I could tell that if I went 90 degrees to the left of the recommended course, we were going to be much better.

I informed the Admiral we were changing course, and we turned 90 degrees left and I started playing with the speed. Pretty soon, we were running with these sixty-foot waves at twenty-six knots. The way we were riding the waves, the ship was rising and falling in more of a straight up and down motion, heaving but not pitching like before. The ride smoothed out.

We would elevator up to the gray foaming wave crests and down into the windswept troughs. It was a much better ride. With the ride less violent, Bos’n Terry Norris and I were walking around the ship, inspecting the decks, marveling at the ocean spectacle. A 1,000-foot carrier is a small boat in the clutches of a powerful sea.

When we got to the coast of India, and the shallowest water I could bear, we turned south. Then all the waves that had carried us along to the east started slamming into the starboard side of the ship. The water peeled off part of my steel starboard catwalk and crushed a steel exhaust pipe from the incinerator against the side of the ship. We endured the beating halfway down the west coast of India and finally, after a full day of pounding, we rounded the cape and sailed without further incident, anchoring three miles off the port of Chennai, India.

In the tumultuous waters of business, imagine your company as an aircraft carrier sailing through the treacherous Indian Ocean during monsoon season.

To ensure a safe voyage, adopt these risk management principles:

1.    Risk Identification – The Weather Watch: Just as I meticulously observed the changing weather patterns, scan your business environment for internal and external factors that could disrupt your business. Encourage a culture of risk awareness where every crew member keeps an eye on potential risks.

2.    Risk Assessment – Charting the Course: Prioritize risks by evaluating their potential impact and likelihood, much like categorizing storm severity. Focus your resources on high-impact, high-likelihood risks, engaging cross-functional teams for data-driven analysis.

3.    Mitigation Strategies – Preparing for the Storm: Develop comprehensive plans, much like preparing for monsoon readiness. Lash down – protect – your assets. Specify clear actions, responsibilities, and timelines. Collaborate with stakeholders to ensure practicality and allocate adequate resources for successful execution.

4.    Ongoing Monitoring – Navigating the Waves: In the ever-changing sea, continuously monitor risks in real-time, just as you would rely on radar data and weather updates. Keep your risk register up-to-date and encourage the crew to report emerging risks promptly.

5.    Effective Communication – Transmitting Orders: Like maintaining communication with your fleet, establish transparent, regular communication channels about identified risks and mitigation strategies within your organization. Additionally, communicate with external stakeholders to maintain trust and compliance.

Incorporate these principles to steer your business safely through the unpredictable waters of risk, just as I navigated that Indian Ocean monsoon.

Risk management is a culture, not a cult.

-John Adams

Lead from your heart. Lead to Win.

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